Wall Street Leaders Can Dare to be Different
By Kate Oddo, Director of Debt Capital Markets, Toyota Financial Services and Karen Papazian, Director, Dealer Lending Operations, Toyota Financial Services April 10, 2015 12:00 PM
Nine out of ten U.S. households own at least one car or truck, and affordable financing helps keep this American dream possible. Our job at Toyota Financial Services is to borrow large amounts of cash as economically as possible in the capital markets, so that we can offer low interest rates to Toyota customers and still make a profit.
Our global scale gives us the opportunity to achieve this business goal while also influencing significant change in unexpected places - including Wall Street. We recently began a Diversity and Inclusion Bond Program, a first in that minority investment banking firms — including those run by service-disabled veterans, women, African-Americans and Hispanic-Americans — are taking the lead role in selling major corporate bonds to investors. Citi helped us bring this new concept to market.
What drew us to Citi for this project is the fact that not only do they share our global scale and market strength, they also share our strong commitment to diversity. And, since we have been a Citi client for many years, we know this comes to life through a strong track record of including minority- and women-owned firms in their own financing transactions.
Those connections and Citi’s expertise made them a natural partner for us. When you have two major firms with very good relations on Wall Street, you can dare to something a little different. After we first pitched the idea, it went through many revisions, because it was a unique concept. We knew our vision and goal, and Citi worked hard to show us how to get there.
Investor interest and reception for the first Diversity and Inclusion Bonds far surpassed our expectations— we’ve raised over a billion dollars to date in the program, much of that from investor sources we’d never reached before. The minority firms get headline exposure on Wall Street as lead partners on a major transaction. That’s an opportunity for them to continue to grow and expand their own platforms.
By working with new kinds of firms, Toyota Financial Services is selling into new pools of investors — and getting tighter pricing so we can offer better rates to our car buyers. These new bonds help us lend money so that thousands of middle-class Americans will now be able to drive a Toyota car or truck, and indirectly support hundreds of thousands of jobs, including those in manufacturing facilities across America.
We’re proud to stand with Citi and demonstrate how market leaders, working together, can change the way things have always been done and enable progress in the world’s capital markets.